the same as so much money at the time the debt becomes due. In the recent case of Loverhill v. Suydam, 59 New York R. 140, decided in 1874, the court of appeals in construing this statute say, that when an executor in the performance of his trust pays the amount due from him to the estate, his debt and all the liens on his individual property, by which the debt was secured, will, of course, be discharged. But before this is done, it was not the intention of the legislature, while preserving the debt, to discharge the liens by which it might be secured. Subjecting the executor as between him and those interested in the estate to liability for his debt, as for so much money in his hands, does not necessarily discharge a lien on the real estate by which the debt may be secured. That provision merely superadds to his original obligation a liability to account as executor for the amount of the debt, and was intended to facilitate the administration, and for the benefit of the estate, and not for that of his individual creditors, who may have subsequent liens on the property." In my judgment nothing could be more just and sensible than the view here presented. Every word that is said applies with equal force to the case of an administrator. The New York statute made no provision for the latter, not because it was intended to place the administrator upon a higher ground than an executor, but because, as already stated, his appointment was never deemed a release or discharge of the debt. It is very true that an administrator, while his letters of administration remain in force, cannot at law be sued for the debt, because in these courts a party cannot be both plaintiff and defendant. But I can see no good reason why those interested in the estate, 1877. March Term. Utterb'k's adm'r V. Cooper. 1877. March Term. Utterb'k's adm'r V. Cooper. creditors and legatees, or distributees, cannot bring him to account, and enforce all the securities he has given for the payment of the debt. Is it possible that in such a case he can insist that the individual debt is paid, and the lien discharged by his qualification as administrator; that his sureties shall answer for a devastavit if he is insolvent; and if they are insolvent, creditors and legatees shall sustain the loss. But if on technical grounds there is any difficulty on this point, surely there is none where the administration is revoked, and an administrator de bonis non has been appointed. In the language of Chief Justice Shaw, in Kinney v. Ensign, 18 Pick. R. 232, the holding the fact of a debtor taking administration upon the estate of a creditor to be a payment, may be deemed a legal fiction adopted for purposes of justice and convenience, but such a legal fiction will never be allowed to go so far as to work wrong and injustice. It is the duty of a commissioner to charge the executor or administrator with all solvent debts due the estate, with or without direction. It is the duty of the executor or administrator to charge himself in such case. When the debt he owes the estate is well secured, parties interested in the estate may properly require he shall account for it as assets; and thus superadd to his individual obligation that of administrator. But the mere fact that the debt is credited in the administration account cannot destroy the original security given for the payment. That security will be kept alive by a court of equity so long as the debt is unpaid, particularly if the debtor has no other means of discharging the obligation. It would be most unjust to hold that the sureties upon the administration bond are liable for the administrator's debt as assets received whenever he charges himself with the debt, and at the same time hold that all the securities 1877. March Utterb'k's which made the debt solvent are by the same act ex- Term. tinguished. In the case of Ipswich Man. Co. v. Story, executor, 5 Metc. R. 310, 314, a decision much relied adm'r on by the appellee, Chief Justice Shaw concedes that Cooper. where the administrator has accounted for the debt as assets, and it is so credited to the estate without objection, yet if the administrator were to die or be removed from office before a decree of distribution or satisfaction of such decree, and it should turn out the administrator has no means to satisfy the amount due on his administration account, a court of equity might hold even in favor of the sureties on the administration bond, that a mortgage given to secure the debt should not be deemed to be discharged. It is only remarkable there should ever have been any doubt upon the point. In the case of Smith v. Gregory, 26 Gratt. 248, this court expressed its entire disapprobation of the doctrine which accords to a fiduciary, at his pleasure, the right to change his liabilities, by charging himself in a particular character with a debt, and thus throw the burden on one set of sureties to the relief of another. A good deal of what is there said applies very strongly to the case under consideration. Bearing these principles in mind, it may be affirmed with entire confidence, that when the negotiation with Cooper for a loan commenced in Baltimore, the debt which Charles H. Utterback owed the estate of his father, Armistead Utterback, was still subsisting as an individual liability, and the deed of trust given by him for its payment was in full force and effect. It is very true that Charles being the administrator of that estate, the right of action was temporarily suspended; but the obligation of the contract remained. When, V. March Term. Utterb'k's V. Cooper. 1877 in February 1867, the administration was revoked and an administrator de bonis non appointed, the right of action revived, and all the remedies and securities for adm'r the debt were as complete as though Charles H. Utterback had not been the administrator. This is so, indisputably, unless in the meantime some act was done which operated as an extinguishment of the individual liability and a consequent discharge of the deed of trust. Conceding for the present that the acts done by Charles H. Utterback as administrator, if bona fide done, would extinguish his individual liability and fix it upon him as administrator and upon the sureties to his official bond, it must also be conceded that these acts, if done mala fide, would have no such effect, even so far as Cooper is concerned, provided the latter had notice of the fraudulent purpose on Utterback's part. In the language of Lord Thurlow, in Scott v. Tyler, 2 Dickens' R., "fraud and covin will vitiate any transaction and turn it into a mere color. If one concerts with an executor by obtaining the testator's effects at a nominal price, or at a fraudulent undervalue, or by applying the real value to the purchase of other subjects in his behalf, or in extinguishing the private debt of the executor, or in any manner contrary to the duties of the office of executor, such conduct will involve the seeming purchaser and make him liable for the full value." But it must never be forgotten, it is not necessary that the person so concerting with the fiduciary shall have actual knowledge of the facts. If there be circumstances which in the exercise of common reason and prudence ought to put a man upon a particular inquiry, he will be presumed to have made that inquiry, and he will be charged with notice of every fact which that inquiry would give him. And this conclusion is a just and necessary one; for if a party means to deal fairly, self interest, the strongest principle of action, will prompt him to the inquiry; and if he means to deal fraudulently, the rule prevents him from voluntarily shutting his eyes and saying he had no notice. This is the doctrine laid down by this court in Graff v. Castleman, 5 Rand. 195, and affirmed over and over again in other cases. But further: I understand the rule to be, that if a man has notice that property is subject to an incumbrance, he deals with it at his peril; for he is affected with constructive notice of every fact to a knowledge of which he would have been led by an inquiry after the incumbrance itself, or other circumstance affecting the property of which he had actual notice. Kerr on Frauds and Mistake, 237, note. How strongly these principles apply to the present case is now to be seen. Upon the arrival of Charles Utterback in Baltimore, in May 1866, in pursuit of money, he was told that Edward K. Cooper would accommodate him if he would take part of the loan in money, that is to say, $5,000, and the balance in the stock of the "Navassa Phosphate company," that is to say eighty-six shares at $70 per share, the whole amounting to the sum of eleven thousand dollars. Now what this Navassa Phosphate company was, what was its precise business, its capital stock, who were its stockholders, or when it was established, this record does not inform us. The only information we have is derived from Mr. Edward K. Cooper himself, or those in his interest. And he and they have not deemed it necessary to enlighten us upon these points. He tells us he was one of the executive committee, and originally owned 9,000 shares, of which he had sold five thousand. The greater part of which he had disposed of in connection with real estate-the owner or vendor receivVOL. XXVIII-35 1877. March Term. Utterb'k's adm'r V. Cooper. |